City eyeing balanced budget

Crundwell money to go toward erasing red ink, Meyer says

Published: Tuesday, July 9, 2013 1:15 a.m. CDT

By DEREK BARICHELLO
dbarichello@saukvalley.com
800-798-4085, ext. 526

DIXON – To understand the city’s finances and the direction they need to take, there needs to be an understanding of how former comptroller Rita Crundwell’s theft of nearly $54 million affected city funds.

Also, Finance Director Paula Meyer said, there is a difference between the city’s budget, expected to be $5,700 in the black this fiscal year, and its ongoing balance – its ongoing net income over the years – which was $7.7 million in the hole coming into this fiscal year.

Meyer was answering questions about the budget that came up at last week’s City Council meeting.

The big one: How is Dixon planning to use the $9 million to $10 million it is expected to receive within the next several months from the sale of Crundwell’s assets?

Most, Meyer said, about $9.5 million, will be used to get rid of negative balances in many of the city’s funds.

Dixon has several funds – the band fund, the Social Security fund, the airport fund, to name a few – for which tax dollars are levied to bring in a certain amount of money.

Several are in the red because of the theft, and by law must be repaid, so about $8.9 million of the $9.5 million coming from the assets will be used to bring those accounts to a zero balance, Meyer said.

“These accounts have restrictions on what their funds can go for,” Meyer said. “This is state money, or money from taxes that had a specific purpose. My goal is to get those accounts back up, so that the city has no more liabilities out there.”

What’s left will be put into the general fund to provide a cushion for uncertainty, she said.

The council has OK’d an annual budget expected to be about $5,800 in the black, even after payments on the city’s $12.7 million in outstanding loans. That budget is the city’s revenue verses its expenses for this fiscal year, and does not include any of the assets money, Meyer said.

In its annual budget, the city plans to spend $1,331,000 on capital projects and $813,315 on equipment. Some of the high-ticket items are $320,000 for a new heating, air conditioning and ventilation system at City Hall, $250,000 for repaving city streets and $250,000 for new dump trucks.

These “one-time” expenses are being paid for with the money Crundwell once was stealing. They also include adding $160,000 to the capital fund and $90,000 to the equipment fund.

“Since [Crundwell] was taking so much, it left a lot of projects in the city that needed to be done,” Meyer said.

She does not know when to expect the assets check – the U.S. Prosecutors still is doing the paperwork, and has not set a date – but it should come before April 2014 – the end of the city’s fiscal year, she said.

What is owed where?

The city owes about $8.9 million to its own funds. Here are the funds and the amount owed: